Multiple Choice
Which of the following are true? choose two)
A) A callable bond allows the lender to ask for the principal to be repaid early.
B) A puttable bond allows the lender to ask for the principal to be repaid early.
C) A swaption that gives the holder the right to receive fixed is equivalent to a put option on a bond where the strike price is the bond's par value.
D) A swaption that gives the holder the right to pay fixed is equivalent to a put option on a bond where the strike price is the bond's par value.
Correct Answer:
Verified
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